Stocks gain; S&P 500 on track for 7th monthly rise

Gold back above $1,400 an ounce; S&P 500 up 3.6% for May

By

KateGibson

NEW YORK (MarketWatch) — U.S. stocks climbed Thursday, with the S&P 500 index on track for its longest monthly winning streak since September 2009, as another report cast a positive light on the U.S. housing market.

“We haven’t had a ‘sell in May’ since this bull market began,” said Randy Frederick, managing director of active trading and derivatives at the Schwab Center for Financial Research, referring to the old Wall Street adage, ‘Sell in May and go away.’

With one trading session remaining in May, the S&P 500 index
SPX, -0.23%
is up 3.6% month-to-date, positioning for a seventh consecutive monthly gain, which would be its longest monthly win streak since the one ending in September 2009.

The Dow Jones Industrial Average
DJIA, -0.32%
rose 21.73 points to 15,324.53, with 17 of its 30 components advancing. Up 3.3% for May, the blue-chip index is in position to notch its sixth straight monthly gain.

Dow member Alcoa Inc.
AA, -1.10%
fell 1.1% after Moody’s Investors Service reduced its rating on the aluminum manufacturer’s debt to one notch below investment grade.

The S&P 500 index added 6.05 points to 1,654.41, with financials leading sector gains and telecommunications losing the most ground among its 10 major industry groups.

Big Lots, Alcoa, EMC

(1:56)

John Shipman highlights some of the stocks to watch for during the trading session, including Big Lots, EMC and Alcoa. Photo: Getty Images

“Those pundits that had you reaching for yield for the last few months in the utilities, REITS (real estate investment trusts) and telephone sectors are all hiding under a rock now,” Elliot Spar, market strategist at Stifel, Nicolaus & Co., wrote in afternoon commentary.

“In the last few days, many defensive names have come under pressure as money flowed out of them into cyclicals,” said Spar, adding that part of the catalyst for the flow was the 10-year Treasury yield remaining over 2%.

A clear break of support at 2% “could be the catalyst for some profit-taking in the cyclical and financials that have attracted money,” he concluded.

“The housing market continues to look good, and GDP growth is slow and steady, which is actually a good environment for stocks,” said Frederick. Since the start of the bull market, now in its fourth year, “you kept hearing you can’t have an economic recovery until you had participation by the housing market. It started in the middle of last year, in the June-July time frame. So now, almost a year later, it’s pretty clear that has happened,” he said.

Getty Images

Pending home sales tick up in April, with the index hitting a three-year high.

A volatile Japanese market remained in the headlines.

The Japanese yen
USDJPY, +0.00%
fell against the U.S. dollar
DXY, -0.30%
and Japan equity index futures bounced higher after Reuters reported a proposed change in Japan’s public pension fund’s strategy would likely bolster equity markets while denting the nation’s currency. U.S. stock-index futures also gained after that report.

Gold futures gained $20.20 to end at a more-than-two-week high of $1,412 an ounce on the Comex division of the New York Mercantile Exchange. And, crude-oil futures
US:CLN3
reversed course to settle up 48 cents at $93.61 a barrel on the New York Mercantile Exchange.

Noteworthy movers on Thursday included Clearwire Corp.
US:CLWR
up 26%, after Dish Network Corp.
DISH, -0.57%
upped its offer for the company, upping the ante in a bidding competition with Sprint Nextel Corp.
S, -1.75%

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